Beginning October 1, 2021, Microsoft has introduced a partner revenue threshold as criteria for eligibility. Partners must now have a trailing twelve month (TTM) revenue of $25k in order to be eligible for the CSP Indirect Reseller incentive program. Partners participating in the incentive program that are not meeting the revenue threshold by October 1, 2021 will be offboarded. Once a partner has met the eligibility criteria, Microsoft will send an invitation to the program and partners will have to enter valid and complete tax and bank details in Partner Center before they can begin earning incentives and rebates.
Additionally, Microsoft has raised the co-op usage threshold from $4,000 to $10,000. This means that partners will now have to earn $10,000 or more in the 40% co-op split in order to use these funds for co-op purposes or they will be deposited directly to the partner.
258 million people used Office 365 every month in 2020, with Microsoft Teams hitting 115 million daily active users in October 2020. There’s no denying that Microsoft is the biggest fish in the ocean when it comes to modern business technology, making it a strong cornerstone around which MSPs can build their tech stacks. And, in doing so, MSPs can take advantage of Microsoft’s Cloud Solution Provider (CSP) Program, which provides incentives and resources to help your Microsoft business grow and succeed.
The CSP program rewards partners for activating and enabling new Microsoft clients. Enrolling in the right competency not only lets you reap the rewards of your license sales through rebates, but also supports your expansion into new markets and business models with go-to-market resources.
However, it can be challenging to figure out how to best optimize your CSP program participation. There are different membership levels and competency areas to choose from, and the incentives and payout structures can change from earning period to earning period. As your Cloud Wingman, we’re here to show you how to earn additional margins on net-new Microsoft clients and navigate the incentives and rebates requirements.
Below are three tips for maximizing your Microsoft earnings.
Set up your program.
Here’s a checklist you can use to get your CSP program up and running:
2. Enroll with an active Microsoft Partner Network (MPN) membership.
3. Meet the performance and skill validation requirements and pay the annual free for a Silver or Gold competency level.
4. Select a competency area.
5. Review the list of available Microsoft incentives and rebates.
6. Actively sell with a valid Microsoft Cloud Reseller Agreement.
7. Complete onboarding to the CSP Incentive tool.
How do you go about choosing between Silver and Gold competencies? Silver has an annual fee of $1,670 and has performance requirements that include adding 4 new Office 365 customers in the last 12 months. Gold has an annual fee of $4,730 and has performance and skill validation requirements that include adding 25 new Office 365 customers in the last 12 months and having two employees at your company pass the exam requirements.
To get a return on your fee investments, it makes sense to enroll at the Silver level if you pay more than $139 per month for internal O365 licenses, are billed more than $3,400 per month in O365 licenses, or billed more than $1,500 per month in M365 licenses.
Competency areas include solution buckets such as “Cloud Productivity” for O365/M365, “Cloud Platform” and “Data Analytics” for Azure, and “Enterprise Resource Planning” for Dynamics 365. Pax8 partners most commonly select the “Small and Midmarket Cloud Solutions” competency area for O365/M365 that emphasizes productivity and security solutions that empower work from anywhere for SMBs. You can view the full list of available competencies here.
Take advantage of all available benefits.
What do you get out of your CSP program participation? Financial incentives such as rebates are a no-brainer, but you’ll also gain access to digital marketing content, presales and deployment resources, partner support, and internal use rights (IURs).
IURs are licenses that allow you to get firsthand knowledge of the features and capabilities of the latest Microsoft software. These IURs can be used to run your business as your team gains valuable hands-on experience to expand your technical expertise and the credibility of your sales pitch. There are core licenses included with all competencies and competency-specific licenses that depend on your chosen competency area.
Understand and use co-op funds.
Beginning January 1, 2020, Microsoft introduced co-op as a component of the CSP Indirect Reseller Incentive Program, with a 60% direct monthly payout and 40% co-op accrual for all products except Azure Reserved Instances (RIs) and software subscriptions. Co-op funds can be invested in marketing activities, specializations, and certifications.
By being reinvested into your business and allocated towards activities that drive sales pipeline growth, rather than shared with customers as a discount or simply sitting in an account, co-op earnings can increase profitability and drive business growth.
Examples of past eligible activities include:
• Demand generation: Print advertising, digital advertising, social media marketing, direct mail/email/or SMS campaigns, website development, and search engine optimization
• Market development: Telemarketing, customer seminars, tradeshows and expos, customer offers, and internal sales performance incentives
• Partner readiness: Microsoft certification exam and tuition fees, internal training to develop sales, marketing, and technical team capabilities, Microsoft hosted conferences, and demo units
Microsoft calculates your monthly incentive earnings with a 60% rebate/40% co-op split on eligible licenses. You’ll receive your rebate earnings through a monthly payout, while Microsoft accrues the co-op portion throughout a six-month earning period.
After the earning period, if your accrued co-op earnings exceed the minimum threshold of $10,000, your funds will be deposited into the Partner Center to be claimed for eligible co-op activities during the next six-month usage period.
Your Microsoft Wingman
Pax8 wants to make it as easy as possible to grow your Microsoft practice — all while streamlining the management of your complete cloud tech stack. Whether you’re brand new to Microsoft or already purchasing through another distributor, Pax8 can effortlessly move your seats today.
We have a team of in-house Microsoft experts who can help you optimize your program participation and keep up with program and product changes. We also offer in-depth educational resources and events to help elevate your team’s Microsoft knowledge and find opportunities to sell more. And our white-labeled Professional Services are always available to help you deploy Azure, harden your Microsoft environment, and more.
We know there’s a lot to figure out when it comes to optimizing your earnings through the Microsoft CSP Program. Our Microsoft experts created the Microsoft CSP Incentives and Rebates Playbook that covers how to participate, how to choose a competency, how co-op funds are earned and accrued, and breaks down the rebates you can expect to earn.